Can you Franchise an Urgent Care Center Concept?

1. Corporate Practice of Medicine and Anti-Fee Splitting Statute. In the State of New York professional health care services can only be offered by licensed health care professionals or authorized professional health care organizations. Furthermore, licensed health care professionals and professional health care organization cannot share the fees that they earn for providing professional services with any individual or organization other than members of their own professional organization.

For purposes of franchising an urgent health care center concept, the critical question that both franchisor and franchisees must ask is whether they can structure the franchise concept such that (a) the franchisee's facility is one that wholly qualifies and is certified as an authorized health care organization that allows unlicensed professionals to act as owners, managers and/or administrators or (b) the franchisor/franchisee concept does not implicate the corporate practice of medicine and/or any applicable anti-fee splitting statutes in any way.

2. Joint Ventures, Management Arrangements and/or Service Agreements. While there are many avenues for structuring the proposed franchisor/franchisee relationship, the proposed urgent health care center concept can model its business relationships after the systems most often found in hospitals and either (a) contract with licensed health care professionals to act as employees and/or independent contractors or (b) contract with a separate entity and establish a joint venture system through which the professional health care services are provided.

3. Implication of Anti-Kickback Statutes. It is important to note that, depending on the structure of the arrangement, certain joint ventures, service agreements and/or management arrangements raise a number of compliance concerns and, in many situations, can implicate both the federal and state-specific anti-kickback statutes. Accordingly, once the full urgent health care center concept is outlined, it is important to evaluate the proposed business arrangement in light of these, among other, federal and state-specific regulatory and compliance concerns to determine whether the desired regulatory balance can be reached and maintained.

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